Why Choose Lightwater?

Canadian Mid-Cap Stock Focus

Lightwater Canadian ‘Mid-Cap’ Stock Definition:

Large Cap >2.5 billion mkt. cap 150 stocks
Mid-Cap $200M to 2.5 bn mkt. cap 450 stocks
Small Cap <$200 million mkt. cap 2,800 stocks

Based on these ranges, 4% of Canadian stocks are large cap, 13% are mid-cap and 82% are small-cap stocks.

Approximately half of mid-cap stocks are in resource sectors. Our focus is on non-resource segments, so our investible universe is about 200-250 stocks.

Why Focus on Mid Caps?

Inefficiency of the Market. Stocks can trade at mis-priced valuations for extended periods of time. We take advantage of the mis-pricing.
Fewer Investors. Better opportunities for those who remain. Concentration of wealth management in Canada has led to larger fund size, who are limited to large-cap stocks. Retail investors are not as active in small and mid-sized stocks as in the past.
Better Risk / Return. Mid-cap companies are typically established businesses so less early-phase problems yet have potential to grow.
Access to Management. We can (and do) call the CEO of a mid-cap company. No chance of that occurring in a large-cap Canadian company.